Dulles Metro Funding At Risk

The estimated cost of the proposed Metrorail extension to Dulles International Airport has grown so significantly over the past three years that it may not meet guidelines for federal funding, the U.S. Transportation Department's inspector general reported yesterday.

The findings represent the first independent look at the mounting price tag for the project's 11.6-mile first phase -- from $1.52 billion in December 2004 to the current estimate of as much as $2.7 billion. Virginia and Dulles Transit Partners, the private construction consortium selected by the state to build the extension, are seeking $900 million from the Federal Transit Administration's New Starts program in addition to a $375 million loan.

But the report, prepared by Rebecca Anne Batts, acting assistant inspector general for surface and maritime programs, describes the project as teetering on the edge of cost-effectiveness guidelines required for federal funding. Qualification for federal money requires an overall rating of "medium low." It is unlikely that the project could be built without federal money.

"Achieving this rating may prove difficult with the current cost increases," Batts wrote. She also cited lack of competition in the award of the contract to Dulles Transit Partners as "one possible cause of the cost growth." The rail contract was awarded under a Virginia law that allowed the state to negotiate with a single bidder. There is no set price that the project would have to meet to achieve the rating, but federal officials had said the project was about at its limit when the cost estimate was $2.4 billion last winter.

The report will almost certainly send the state, Dulles Transit Partners and the Metropolitan Washington Airports Authority, the agency that would oversee construction, back to the drawing board in an attempt to prune costs.

In a prepared statement, authority spokesman Robert Yingling said: "We welcome this vigorous analysis. . . . We are committed to working closely with the Federal Transit Administration and all project partners to address these issues and ensure completion of this important regional transportation project in a cost-effective manner."

Batts also recommended that the FTA reevaluate a specific aspect of the project's cost analysis known as "transportation user benefit" -- the estimated number of hours saved by weekday commuters as a result of the rail line. User benefit guidelines have become more stringent since the Dulles project began, and the inspector general recommended that the rail venture be evaluated against the updated requirements.

The report said costs will continue to rise. It cited a clause in the state's contract with Dulles Transit that calls for the contract price to increase each day past Aug. 1 that federal approval to begin work on final design is delayed.

The FTA has 30 days to respond to the inspector general's report. In a statement, FTA Administrator James Simpson said that the report "raises important concerns" and that the agency would take the findings "very seriously."

Critics of the project said yesterday that the report only confirms that the project is a grave financial risk. "It looks like some well-honed noses have caught up with the stink," said Fairfax County Supervisor T. Dana Kauffman (D-Lee). "While there's nothing new here, it's now been officially noted by independent review."

Rep. Thomas M. Davis III (R-Va.) pledged to do what he can to help the project win federal funding but said changes would have to be made in the cost structure.

"I think the project has issues," he said. He expressed particular concern about tolls from the Dulles Toll Road, which are expected to pick up a major share of the local costs. At the moment, he said, no one really knows how much they would have to increase to finance the rail line.

"There's a lot of work to be done," he said.

The report focused on the first phase of Dulles Rail, from Falls Church through Tysons Corner to Wiehle Avenue in Reston. Work is scheduled to begin this fall with utility relocation along Route 7 in Tysons and end in 2013. The second phase, from Reston to the airport and into Loudoun County, is expected to be finished by 2016.